Business / Corporate

Kobe Steel indicted over fabrication of data for products used in trains, aircraft, vehicles and defense equipment


Prosecutors indicted Kobe Steel Ltd. on Thursday on suspicion the firm violated a law that prevents unfair competition by fabricating data related to the quality of its products.

But they exempted four plant officials from prosecution, with investigative sources saying the officials were not fully aware of the violations when they altered data on product strength and other details, as the extent to which the steel-maker had continued the fabrication led to it being seen as customary.

Three of the company’s plants in Tochigi, Yamaguchi and Mie prefectures sent about 300 certificates to clients between September 2016 and September 2017 attesting to the quality of products which in fact failed to meet clients’ specifications, according to the indictment.

Kobe Steel said in a report released in March it had confirmed incidents of the malpractice at 23 domestic and overseas plants, and that data falsification dated back to the 1970s or earlier at the plant in Tochigi.

The report concluded that an exclusive focus on profits among management and insufficient corporate governance were to blame for the scandal.

The aluminum and copper products in question were supplied to over 600 companies at home and abroad, and were used to manufacture bullet trains, aircraft, vehicles and defense equipment.

The U.S. Department of Justice is also investigating the scandal, while customers in the United States and Canada have filed class-action lawsuits against Kobe Steel seeking compensation for the shipping of substandard products.

But many of its clients have kept their contracts even after the scandal emerged last October, saying they confirmed the safety of its products, according to Kobe Steel.

“We once again deeply apologize for the considerable trouble we have caused,” Kobe Steel said in a statement Thursday, adding that it will strive to regain trust.

Police and prosecutors last month searched the Kobe Steel headquarters in Tokyo and Kobe as well as other locations for evidence, and to question employees including plant officials.

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